Portugal faces third election in three years as government loses confidence vote

Two-party alliance led by the Social Democratic party was in power for less than a year

Portugal's minority government has lost a vote of confidence in parliament, forcing its resignation and bringing the EU country's third general election in three years.

The exact vote count wasn't immediately available, but the speaker of parliament, Jose Pedro Aguiar-Branco, said the center-right government was defeated.

The government, a two-party alliance led by the Social Democratic party (PSD) and in power for less than a year, had just 80 seats in the current 230-seat legislature. An overwhelming majority of opposition lawmakers had vowed to vote against it.

The government asked for the confidence vote, saying it was needed to dispel uncertainty" about its own future amid a simmering political crisis that has focused on Social Democrat prime minister Luis Montenegro and distracted attention from policy.

The controversy has revolved around potential conflicts of interest in the business dealings of Montenegro's family law firm.

A new election is likely in May.

Montenegro, who had said he would stand for reelection if the government fell, has denied any wrongdoing. He said he placed control of the firm in the hands of his wife and children when he became PSD leader in 2022, and has not been involved in its running.

It recently emerged that the firm is receiving monthly payments from a company that has a major gambling concession granted by the government, among other sources of revenue.

An election would pitch the country of 10.6 million people into months of political uncertainty just as it is in the process of investing more than 22bn ($24bn) in EU development funds.

Portugal has also been caught up in a rising European tide of populism, with a radical-right party surging into third place in last year's election. Voter discontent with a return to the polls could play into the hands of the Chega (Enough) party, which has fed off frustration with mainstream parties.

The Social Democrats are hoping that economic growth estimated at 1.9% last year, compared with the EU's 0.8% average, and a jobless rate of 6.4%, roughly the EU average, will keep their support firm.

The next general election in Portugal was previously scheduled for January 2028.